Supplemental Benefit Series: Short Term Disability and Accident Policies

Often, I receive inquiries from individuals wanting to purchase Short Term Disability on an individual basis. Typically, carriers will not offer short term disability individually as it is not cost effective. Standard short-term disability benefits start either first day for injury or illness or often first day injury and seventh day illness. Can you guess who is traditionally most interested in this benefit? Young females. Can you guess why? BABIES. Short term disability would cover a portion of mommy’s income from day seven after the birth possibly up to 13 weeks (usually the 6 – 8 weeks depending on the type of birth). Supplemental carriers like AFLAC, Colonial, All State, etc. offer this benefit, but only on a group basis. The benefit is often written from 50% to 70% of the employee’s income and is what would be paid out during a short disability. No carrier will pay out 100% because of cost and incentive to go back to work. When purchasing short term disability and paying the premium, it is in the employee’s best interest to pay the premium AFTER tax out of their paycheck. The reason is that when they use the benefit NO taxes are taken from the benefit dollars being paid out.

Another benefit offered by supplemental carriers is an Accident policy. EVERYONE knows the AFLAC commercials where people get hurt. Personally, I have slipped on the ice and gone to the chiropractor. Under my accident policy I have six chiropractic visits available for an accident with a payout of $35 a visit. This almost covers the cost of my chiropractic visit. These plans work by placing a specific dollar amount on specific accidental event. Let’s take an example: A broken leg requiring a visit to the Emergency Room, crutches, cast, and physical therapy. Here are the potential payouts: ER Visit $120, X-rays $25 per accident per person, follow-up treatment $35 per day per accident. The fracture itself would allow a payout of anywhere from $25 to $2,500 depending on the severity. Physical therapy would be $35 per visit per accident, and finally crutches (appliance) would be $125. These benefits are paid out to the policyholder and the funds can be used for anything. If you need gas for the car, groceries, an electric bill paid or if you want to put the money toward deductibles of your health plan. It is up to the policyholder on how to use the money.

In the supplemental market, carriers typically require at least three separate employees to purchase one policy each, making it three policies under the group-(employer)sponsored plan. One individual cannot purchase all three. If interested let us know. Health Insurance Advisor would be happy to explain the plans and their value to your employees. Next month look for details on Cancer policies and Critical Illness benefits.

A little more about us:The Business Warrior group has some of the industry’s top experts in all the areas your business needs to be successful. Amongst the contributors is Janis VanAhn, owner of Health Insurance Advisor, LLC. For 19 years Janis has worked in and around the health insurance industry initially providing service to agents and employers related to employee benefits, individual healthcare and Medicare, while more recently becoming appointed as an individual agent with various quality carriers to provide this service to individuals through her own business.

Four years ago Janis was ‘blessed’ with being let go from her job at an insurance ageny. Staying within insurance was her path…but in what capacity. 2010 was the year Janis began her career as an independent insurance agent specializing in health insurance. Finding quality, cost-effective healthcare for individuals and families under age 65 as well as working with those who are Medicare eligible truly was her passion. She has made this a true specialty and positioned herself as someone to work with whether it is a financial professional or property & casualty agent with a client that needs assistance, to a group of seniors turning 65 and they keep receiving Medicare information and are confused about what to do.

Janis enjoys the one on one contact with clients as well as looking forward to speaking to groups about healthcare. Her excitement for this industry is what drives her to stay in tune with Healthcare Reform and what is currently happening and what will happen with coverage from now to past 2014.

‘Educating individual and Medicare consumers to make informed choices’ is her mission because if people are educated and understand, they will make informed choices that they are comfortable with.